Good morning. Well after a few sessions we got some bearish movement and one of those frustrating trending days where the stops always seem to get hit on the trade, so the 6936 long got stopped out. Bulls didn’t put up much of a fight yesterday, even with it being bull Tuesday soap breakout to the downside could be the start of the dip, especially so if we break below yesterdays low of 6876. However, the lowest support on the S&P I had for yesterday held well, being 2098 – even getting a rise to 2108, though the FTSE didn’t really follow that sort of rise, only hitting 6908 from the low. The divi today is 14.46 so we could see some divi hunters buying up the FTSE at the bell, as thats quite a decent amount.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks fell from a six-month high, tracking declines in European and U.S. equities, as telecom companies led losses. Japan’s Topix index retreated from its highest since 2007 as the yen held gains against the dollar.
The MSCI Asia Pacific Index slid 0.3 percent to 146.10 as of 9:01 a.m. in Tokyo after closing yesterday at its highest since Sept. 10. The measure gained for four straight weeks in February to post its biggest monthly advance since September 2013. It traded yesterday at 14.6 times the estimated earnings of its constituent companies, the highest in almost two years.
“The lack of fresh sparks has prompted investors to take profits and wait for new signals,” said Matthew Sherwood, the Sydney-based head of investment markets research at Perpetual Ltd., which manages about $21 billion. The market “is starting to show signs of fatigue and is now lacking momentum as earnings downgrades begin to overpower the impact of increased monetary stimulus and an improving U.S. economy.”
Japan’s Topix index lost 0.6 percent as the yen traded at 119.61 per dollar after rising 0.3 percent yesterday. South Korea’s Kospi index was little changed, and Australia’s S&P/ASX 200 Index slid 0.2 percent. New Zealand’s NZX 50 Index fell 0.3 percent.
Markets in Hong Kong and China are yet to open. Futures for Hong Kong’s Hang Seng China Enterprises Index slipped 0.2 percent and contracts traded in Singapore on the FTSE China A50 Index lost 0.3 percent in most recent trading. Alibaba Group Holding Ltd. sank 2.9 percent in New York to its lowest level since its September debut as better-than-projected earnings by competitor JD.com fueled concern Alibaba’s growth may be slowing.
China Unicom (Hong Kong) Ltd., the nation’s second-largest wireless carrier, fell the most in 16 months in New York, leading a retreat in Chinese mobile phone companies, after reporting 2014 earnings that fell short of estimates.
The Shanghai Composite and the Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong slipped 2.2 percent yesterday. China’s government may set a growth target of around 7 percent for this year, the Xinhua News Agency reported, compared with the 7.5 percent target in 2014. The National People’s Congress starts on Thursday.[Ref]
FTSE Outlook
Todays pivot is 6914 so there is initial resistance there, with 6940 above that. We have both the Bianca channels showing support at 6898 first thing, pretty much were we are as I write this, and having bounce off the 25ema on the daily at 6874 yesterday, we could get an initial rise, certainly to the pivot, if not slightly higher. If the 6875 level breaks today then we are likely to dip down towards the daily coral line currently at 6810, though there is some support at 6830 first. Resistance wise, above the 6914 pivot is 6940, then 6962 (most recent high), then the top of the Bianca channels at 6982 and 6996. After the punch on the nose the bulls got yesterday and with most people feeling a little reluctant to pile into massive longs while we are so high, the bias is probably with the bears still, so shorting off the resistance areas, especially 6940 if seen, could be a good play for today. As mentioned above there is a 14 point divi to be applied later (some platforms apply it at 16:30, others at 9pm) so we may well see some buying going into the close.